MERCHANDISER
Worldwide Exploration Trends 2014
Responding to lower metals prices, uncertain demand, and poor market conditions, all company types cut their exploration activity sharply in 2013. The result was a 29% decrease in estimated worldwide nonferrous metals exploration budgets compared with 2012. SNL Metals & Mining’s 24th
edition of
Corporate Exploration Strategies (CES) calculated that the mining industry’s total budget for nonferrous metals exploration was $15.2 billion in 20131, significantly lower than the record $21.5 billion total in 2012. The steep plunge in exploration budgets was due to a combination of investor wariness of the junior sector that made it difficult for most companies to raise funds, and a strong pullback by producing companies on capital and exploration spending to improve their margins.
FIGURE 1 SHOWS SNL Metals & Mining’s estimate of annual nonferrous exploration allocations since the early 1990s relative to a weighted annual metals price index. The chart indicates the cyclical nature of exploration investment and the correlation between metals price trends and exploration spending. Rising metals prices fueled an initial increase
in worldwide exploration from 2002’s low, while the emergence of China’s appetite for resources led to a multiyear bull run that sent the worldwide exploration budget total to a new high of $13.75 billion in 2008 – a 677% increase from the bottom of the cycle in 2002. The mining industry’s boom years came to an
abrupt halt in September 2008 as the world fell into the worst economic downturn in decades.
Estimated Global Nonferrous Exploration Budget Totals, 1993-2013
Nonferrous Exploration Total
$12 $16 $20 $24
$0 $4 $8
SNL Metals & Mining Indexed Metals Price 5
4 3 2 1 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 Top Exploration Destinations 2013 0
Russia Canada 13% 4% Europe United States Mexico 7% 2% 6% 6% Peru 5% Chile 6%
Other Latin America Brazil
3%
West Africa 6%
3% East Africa DRC 2% 3% Southern Africa Australia 13% 6% Pacific Islands FSU 2% China 4%
5%
Other locations account for 6%.
22
March 2014
Indexed Metals Price (1993=1)
Nonferrous Exploration (US$ bil)
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76